Daniels v Brooks & Anor[2007] QDC 1

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   This is an application under Pt 4 of the Succession Act 1981 for an order that further and better provision be made for Leonard Anthony Daniels (‘Leonard’) out of the estate of his stepmother. Leonard is one of the stepchildren of the testatrix (‘Jess’) who died on the 23^rd February 2002. In her last will dated 28^th June 1989, (Exhibit 1), Jess appointed her sister Daphne Wilson as her executrix, left $2,000 to each of Leonard’s sons, Gerard and Gregory, furniture of limited value to Leonard and his sister Marcella O'Toole, some chattels of a limited value to Leonard’s daughters and the residuary estate to her sister Daphne Wilson (Exhibit 2).

2. [2]
   It is estimated that the net sum to be distributed as at February 2007, taking into account the costs of these proceedings, will be in the order of $410,500.00.

Background Facts

3. [3]
   Leonard was born on 24^th October 1935. He has two (2) siblings, Marcella O'Toole (‘Sally’) and Laurence Daniels (‘Laurence’). Leonard, Sally and Laurence are the biological children of Williams Daniels and Eileen Daniels. Eileen died in November 1953 after a long illness. Williams Daniels then married Jess in 1956. They had no biological children of their own.

4. [4]
   Leonard married Veronica (‘Von’) on the 7^th January 1956. They then moved to Gympie to live until 1960.

5. [5]
   Sometime between 1956 and 1960, Jess and William Daniels bought a home situated at 21 Mark Street, New Farm (the ‘Mark Street property’) together as joint tenants. That purchase had been financed by mortgaging the family home which William Daniels had shared with Eileen Daniels during her lifetime and owned prior to his marriage to Jess (the ‘Corinda property’). (affidavit of Leonard Daniels sworn 26^th November 2003, paragraph 10).

6. [6]
   During the time that Leonard and Von lived away from Brisbane, they would often visit William and Jess and on a number of occasions stayed at the Mark St property.

7. [7]
   After their return to Brisbane in 1960, Leonard and Von initially lived not far from Jess and William and visited at least once per week. Leonard and Von proceeded to have six (6) biological children of their own. Additionally, they also provided a home for a large number of foster children over the years.

8. [8]
   From an early stage, Jess became a grandmother to all of Len and Von’s children. Some of those children spent many of their holidays at the Mark Street property with Jess and William.

9. [9]
   During the time that William was alive, both he and Jess had attended at all of the significant celebrations for Len and Von’s family, such as christenings, communions and weddings.

10. [10]
    William and Jess lived together at the Mark Street property until 8^th June 1974 at which time William died. Under William’s will, Jess received the Mark Street property as the surviving joint tenant, the benefit of some insurance policies held by him, all of his personal and domestic items (of unknown value) and a one sixth share of the residuary estate. (annexure to affidavit of Leonard Daniels sworn 13^th November 2006).

11. [11]
    The residue of William’s estate included the previous family home (the Corinda property). As already indicated, Jess received one sixth of the residuary as did Leonard and Sally. Laurence received the other half of the residuary.

12. [12]
    Jess continued to live at the Mark St property for a further 27 years. She did however stay with Leonard and his family at their home at Graceville (the ‘Graceville property’) after her discharge from the Royal Brisbane Hospital in late 2001. She had been admitted due to her failing health. She remained at the Graceville property with Leonard’s family until her death on the 23^rd February 2002, during which time she received assistance from Von and her daughters and others.

13. [13]
    Leonard and Von had bought the home at Graceville in 1979 property. They resided at the Gold Coast however from about 1990 until their return to Brisbane in about 1997. One of Leonard and Von’s daughters, Patricia (and her family) had moved into the Graceville property in 1989. Substantial renovations were carried out by Patricia and her family while Leonard and Von during the time they were living at the Gold Coast. Further renovations were also carried out after their return to Brisbane, all of which were predominantly paid for by Patricia and her husband.

14. [14]
    The Graceville property consequently evolved to its present state in which Leonard and Von remaining living downstairs while Patricia and her family live upstairs.

15. [15]
    In 2002, Leonard and Von had decided to transfer their legal ownership of the Graceville property to Patricia and her husband with Leonard and Von each retaining a life interest in that property. The arrangement is that Leonard and Von may reside there (rent free) for the rest of their lives. As part of that arrangement, Patricia and her husband met the rates in relation to the home while Leonard and Von pay all of the ‘utilities’ (gas and electricity) and ‘at least’ 50% of the ‘general upkeep’ for the house.

16. [16]
    Leonard had retired from his employment in 1986 due to ill health. At least since that time, his health has prevented him from rendering any or any real significant assistance to Jess when she was alive. It also seems that even before that time, it was either Leonard’s wife or his children that rendered most assistance to Jess even though she was a fiercely independent lady who did not accept help easily from others.

17. [17]
    Notwithstanding that fact, the association and contact between Jess and Leonard and his family certainly increased after William’s death. Jess continued in her role of grandmother and continued as before to attend all of the family celebrations. Each year, Leonard’s family also always celebrated her birthday. During her later years, and about the time when Jess began to grow frail (about 1997), Leonard and Von would visit Jess a number of times a week to ensure that she was alright particularly as she had ‘no need’ for a telephone.

18. [18]
    Leonard’s family, rather than Leonard himself, continued to render what assistance they could to Jess with Von and one of their sons Gerard take prime responsibility for Jess’s direct needs, such as driving her to the shops, the bank or to her lifelong hobby, to the racecourses.

19. [19]
    She died in Von’s presence on the 23^rd February 2002. Leonard and Von organised Jess’s funeral.

Legal Principles to be applied

20. [20]
    Section 41(1) which is found within Pt 4 of the Succession Act 1981 provides:

“If any person (the “deceased person”) dies whether testate or intestate and in terms of the will or as a result of the intestacy adequate provision is not made from the estate for the proper maintenance and support of the deceased person’s spouse, child or dependent, the court may, in its discretion, on application by or on behalf of the said spouse, child or dependant, order that such provision as the court thinks fit shall be made out of the estate of the deceased person for such spouse, child or dependant.”

21. [21]
    As observed by His Honour Justice Mackenzie in Powell v Monteath [2006] QSC 024, the question which is raised by s 41 of the Act is whether adequate provision was not made from the estate for the proper maintenance and support of the applicant in this case, Leonard. Singer v Berghouse (1994) 181 CLR 201 confirmed that there is a two-stage process involved in deciding whether the discretion given by s 41, to award provision out of the estate to be made for an applicant, should be exercised.

22. [22]
    The determination of the first stage involves a consideration of whether or not Leonard has been left without adequate provision for his maintenance and support. If that question is answered in the affirmative then the second step is what provision, if any, should be made from the estate.

23. [23]
    The approach which is to be adopted when approaching the first stage is set out in the majority judgment in Singer at 209-210.

“The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.”

24. [24]
    That approach remains good law after being considered by the High Court in Vigolo v Bostin (2005) 79 ALJR 731 at paras [22] and [75].

Preliminary Point

25. [25]
    A preliminary point was raised at hearing.

26. [26]
    Objection was taken regarding the admissibility of paragraph 21: 1^st and 2^nd sentences contained in the affidavit of Leonard Anthony Daniels sworn 25^th November 2003.

27. [27]
    The basis of that objection was that the relevant paragraph in question was both hearsay and irrelevant. Oral submissions were received from counsel on this point for my consideration.

28. [28]
    It is well established law that evidence of the reasons given by a deceased for making, or for failing to make, adequate provision for a particular application is ordinarily admissible in proceedings for family provision. (Hughes v National Trustees Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134 at 137, 150, 159.)

29. [29]
    It is also clear that evidence of intentions and wishes of a deceased in respect of provision for an applicant are admissible in family provision proceedings. (Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 481-482).

30. [30]
    This evidence is relevant again by virtue of the fact that the court must put itself in the position of the deceased at the time of his or her death. The weight (if any) to be given to such evidence however depends on the nature and the circumstances of the case. For example, the evidence may be of some significance in a case where the deceased may have intended to make provision for an applicant but failed to do so on account of a mistake or oversight.

31. [31]
    Indeed, such evidence has been recognised in Hughes as being admissible as original evidence to prove the knowledge, motive or other state of mind of the deceased should that be relevant.

32. [32]
    In Re Taylor [1968] Qd R 385 at 391-2, Lucas J also acknowledged that the promises which a testator had made to others of reward under his will may well be a relevant consideration in such a proceeding but noted that it was also quite permissible for a testator to change his or her mind about any promise he or she had made. As noted by His Honour, simply because he or she does, that does not of itself attract the jurisdiction of the Court, so long as he or she has not failed to make adequate provision for the applicant’s proper maintenance and support.

33. [33]
    The respondent argues that the evidence sought to be led does not satisfy the threshold required for its admission namely that at the time Jess made her will, she was labouring under some mistake or there was an oversight on her part.

34. [34]
    In support of that submission, the respondent says that the evidence is so vague that it cannot be said that it can support such a conclusion, particularly in view of the vagueness as to when the statements were said to have been made in relation to the actual making of the will by Jess.

35. [35]
    The applicant, on the other hand, says that the evidence is clearly admissible and relevant particularly in circumstances where no provision was made by Jess under her will for Leonard and the statements which had been made by Jess were to the effect that she would make sure that Leonard would be looked after in the context of him having only having received a one sixth share, rather than a third or a quarter, of his father’s residuary estate.

36. [36]
    Accordingly, I am satisfied that this evidence is admissible. The weight that can be attached to those statements is however a different matter, particularly when it is unclear on the evidence available, to what degree Jess intended that Leonard ‘would be looked after,’ or when those statements were said.

37. [37]
    As such, the weight that can be given to any such statements by Jess, is in my view, minimal.

The two-stage process - Stage 1

General principles

38. [38]
    In the case of a step-child, there is no need to demonstrate inordinately necessitous circumstances, or indeed circumstances that might be more necessitous than must be demonstrated by a biological child. It is well settled that these general principles also apply to the case of an adult son as well as to other cases. However, in the case of an adult male child, the view remains that he may be required to show some special need or special claim because usually, if the son is mature, able-bodied and capable of supporting himself, he may in those circumstances be in no need of maintenance or support. (Hughes at 147).

39. [39]
    One such case where a special claim may be found to exist is where an applicant has contributed to building up the testator’s estate, has helped him or her in other ways or is suffering from some physical or mental infirmity for example

40. [40]
    As recognised in Hughes, there are no rigid rules; the question whether adequate provision has been made for the proper maintenance and support of an adult son depends on all the circumstances, that is, on all the facts that existed at the date of the death of the testator, whether the testator knew of them or not, and all the eventualities that might at that date reasonable have been foreseen by a testator who knew the facts.

Relevant facts and circumstances

1. Competing claims of potential beneficiaries

41. [41]
    There are no relevant competing claims to the estate. The respondent, Daphne Wilson’s died on the 25^th November 2004. Her share in Jess’s estate passes by her will to certain of her relatives, none of whom asserts any particular claim on the Jess’s estate.

2. Leonard’s financial position

42. [42]
    Leonard and Von’s joint household income is $665 per week, from a superannuation pension and the aged pension. Their joint expenditure is ‘in excess of $500 per week’(T47 l 10-20) and as such, this Court is not aware what the surplus of income over expenses is.

43. [43]
    Having given his house away to his daughter Patricia and her husband, Leonard and Veronica’s joint assets are currently some savings of about $20,000, a 2002 model motor vehicle and some household furniture. The evidence available supports the conclusion that his family readily provide him with financial support, like offering to pay for a holiday to Ireland for him and the like. Since 2000, after ceasing to care for foster children, he and Von have managed to save $20,000 despite paying for all the utilities on the Graceville home and paying for ‘at least’ half of the general upkeep costs of the property.

44. [44]
    The cost which Leonard has in respect of his various medications, creams and gels which aren’t met by his Government Health Benefits card is somewhere in the order of $55 per week for at least half of each year because of operation of the PBS ‘safety net’.

3. Assets and available resources

45. [45]
    Leonard does not have any significant assets of value. While at one time he and Von owned their house at Graceville outright, that house now belongs legally to their daughter Patricia and her husband. While it is true that the transfer of the legal ownership took place only at a date subsequent to Jess’s death, the situation for Leonard has remained much the same to that which existed even before that formal transfer took place namely, that Leonard had financial responsibilities in respect to the home notwithstanding that he and Von now live there ‘rent free’.

4. Health concerns and impact on employment

46. [46]
    Leonard had to retire from employment altogether in 1986 due to ill health. He will never return to employment again.

47. [47]
    Leonard is now 71 years old. He has had a number of health conditions for many years evidenced in his affidavit sworn 13^th November 2006 and as documented in the reports of Drs Levine and Matthews (Exhibits 5 and 6 respectively). Those health conditions are confirmed in the reports of Dr Ringrose (Exhibit 4). He has suffered since the early 80s, debilitating symptoms of rheumatoid arthritis, diabetes and a condition called Myasthenia gravis (a condition affecting vision). During the course of giving his evidence, Leonard clearly demonstrated difficulty in reading his affidavits because of his eye conditions. The myasthenia gravis, together with rheumatoid arthritis and his sugar diabetes were the reasons he said which led him to retire from his employment when he did.

48. [48]
    In 2001, he also suffered a heart attack. In October 2001, Leonard underwent surgery for a quadruple heart by-pass. In that same year, he also became insulin dependent.

49. [49]
    The medications which he takes for his various illnesses and medical conditions can have significant and serious side effects.

50. [50]
    He also suffers from chronic pulmonary disease. He was hospitalised twice in August 2006 due to pneumonia, although he has now recovered.

51. [51]
    Leonard suffers from diabetic retinopathy and glaucoma. Thee former condition causes swelling and rupture of the small blood vessels of the retina and has the potential to render him completely blind.

52. [52]
    Dr Levine confirms that each of those conditions pose a significant threat to Leonard’s eyesight.

53. [53]
    Dr Levine also confirms in his report that because of the severity of Leonard’s rheumatoid arthritis he may need one or more joints replaced surgically. He states that Leonard was an obvious candidate for joint replacement surgery and that the joints in his hands were also noticeably affected.

54. [54]
    He stated that the approximate cost of having knee replacement surgery undertaken in a private facility was in the order of $10,000.

55. [55]
    Due to the myriad of illnesses and ailments from which he has and now suffers, Leonard’s life expectancy at present is somewhere between 4 to 7 years, that is around the age 75 to 78 years. The medical evidence supports that assertion.

56. [56]
    While it is true that Leonard states that he only spoke to Jess occasionally about his various medical illnesses and ailments over the years, it is clear on the evidence available that many of his conditions have become progressively worse over the years, a fact that would have been reasonably foreseeable to Jess particularly in light of her close contact over those years with Leonard and members of his immediate family.

57. [57]
    While I accept the submission on behalf of the respondent that there is no concrete evidence to support when the knee surgery may be performed or even what assistance may be required in the future in relation to any of Leonard’s health conditions, I also accept what Dr Levine has stated which was, that upon his most recent examination of Leonard, he was of the opinion that he was an obvious candidate for joint replacement surgery.

58. [58]
    I am also satisfied that Leonard’s myriad of very serious health illnesses and ailments will or may require him to need more medical care and attention than at present, particularly as he continues to age.

5. The totality of the relationship with the deceased

59. [59]
    The evidence available shows that Leonard did have a loving relationship with Jess during the time of her life. While it is true that Leonard, due to his own health problems has been unable to assist her greatly throughout the years, she was always a close part of his family and he regularly remained in contact with her throughout her lifetime.

60. [60]
    Indeed, she felt comfortable with the idea of spending her last months in his home even though she was a fiercely independent lady who enjoyed life.

6. Any grounds for disentitlement

61. [61]
    There is no disentitling conduct of relevance in respect to the relationship between Jess and Leonard.

7. Contribution to build up of Jess’s estate by Leonard, directly or indirectly

62. [62]
    This matter was raised during the course of the hearing.

63. [63]
    It concerns what may be done in the case of a stepchild (Leonard) whose natural parent (William) predeceased the step-parent (Jess) and his interest (if any) in any assets accumulated during their marriage then passes on to the step-parent, who in turn does not make adequate provision for the stepchild in her will.

64. [64]
    In the present case, it was argued on behalf of Leonard that because the purchase of the Mark St property occurred only as a result of his father’s Corinda property being mortgaged, it follows that Leonard has (indirectly) contributed to building up of the estate of his stepmother Jess.

65. [65]
    There is clear authority for the proposition that such claims may be made particularly where a step-parent has received the whole of the estate. (Freeman & Ors v Jacques [2005] QCA 425 at para 40.)

66. [66]
    Justice Mullins also observed at 1^st instance in Freeman, (which was a case involving stepchildren making a claim against their step-parent’s estate), that what the applicants had received from their father’s estate was relevant to the determination of the jurisdictional issue in respect of their claims, it did not necessarily dispose of it.

67. [67]
    In the present case, Leonard received a one sixth share in his father’s residuary estate upon the distribution of it after he died in 1974.

68. [68]
    Consequently that in itself is a relevant factor in respect of his claim upon Jess’s estate.

69. [69]
    However, there is also no evidence available regarding the assets Jess may have introduced (if any) into the marriage with William, whether she or even William ever worked during the course of that marriage, what contributions (if any) were made in respect of the purchase price of the Mark St property (other than the fact that the Mark St property was initially purchased by the mortgaging of Williams’ Corinda property) or who made the repayments in respect of the Mark St property subsequently. Indeed, it is unclear to me under what circumstances the Corinda property was actually placed up as security for the Mark St property home in order to obtain finance.

70. [70]
    Accordingly, it is difficult, if not impossible, to determine what level of contribution (if at all) Leonard’s father has contributed in the accumulation of Jess’s estate in all the circumstances notwithstanding that I accept that the Corinda property owned solely by William was initially used to assist the purchase.

71. [71]
    Accordingly, as I am unable to make any findings as such, I am not in a position to accept the submissions made on this point on behalf of Leonard in all the circumstances.

Conclusion

72. [72]
    Having considered then all of the relevant considerations, and in particular, in respect of Leonard’s current serious health issues, I conclude that he was left without adequate provision for his maintenance and support by his stepmother Jess.

The two stage process – Stage 2 (the exercise of discretion)

73. [73]
    I now proceed to exercise the discretion required in the second step in the process.

74. [74]
    With respect to the second stage, the majority judgment in Singer says, at 210:

“The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance.”

75. [75]
    As observed by Justice McKenzie in Powell v Monteath at paragraph [20],

“it is said that, in determining the first step, although a value judgment must be made, the question whether adequate provision has not been made for proper maintenance and support of the applicant is a question of objective fact to be determined by the trial judge. By contrast, the decision at the second stage involves the exercise of a discretion in the accepted sense. The fact that the court has a discretion means that it may refuse to make an order, even though the jurisdictional question has been answered in the applicant’s favour.”

76. [76]
    What is an appropriate amount in a particular case is largely based on an individual’s perceptions. It is not a case where mathematical certainty can be applied. Although, I was provided helpfully with decisions which demonstrate what has been done in other cases, each of those were cases with different facts and therefore can only provide an insight into how the questions that had to be asked were answered on the facts of those cases.

77. [77]
    They do provide however some general guidance in determining what may be an appropriate amount to be ordered in this case.

78. [78]
    Allowing for a significant discount which I must, particularly in view of the accepted estimate regarding Leonard’s life expectancy (which was 4 to 7 years at best), I consider that a payment of a sum of $ 100,000 is appropriate in all the circumstances of this case. I have made this assessment based on the significant health concerns which Leonard currently has which will, during his estimated unfortunate short life expectancy, continue to undoubtedly impact upon him.

79. [79]
    Leonard’s financial situation is quite modest and he relies, in part, on his wife Von’s income and his family’s support. As there are no competing claims, the following order which I make is, in my view, appropriate to, provide Leonard with proper maintenance and support required for his remaining lifetime. It will also assist him in meeting his share of the outgoing expenses, his current medication expenses and any future joint surgery.

Orders:

1. That further provision be made for the proper maintenance and support of Leonard Anthony Daniels out of the estate of Kathleen Jessie Daniels (Deceased) by payment of a lump sum of $100,000.

2. That the parties be given leave to make submissions in writing on costs within 28 days, failing agreement between the parties.